Author
Zhe Zhang
Bio: Zhe Zhang is an academic researcher from University of California, San Diego. The author has contributed to research in topics: Sharing economy & Durable good. The author has an hindex of 2, co-authored 2 publications receiving 52 citations.
Topics: Sharing economy, Durable good, Market structure, Monopoly, Population
Papers
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TL;DR: In this article, the authors analyzed the interaction of a peer-to-peer (P2P) rental market and an original equipment manufacturer (OEM) and highlighted the important role of consumer heterogeneity in usage rates as a driving factor of the mechanisms that explain the different market outcomes.
Abstract: Business models that focus on providing access to assets rather than on transferring ownership of goods have become an important industry trend, representing a challenge for incumbent firms. This paper analyzes the interaction of a peer-to-peer (P2P) rental market and an original equipment manufacturer (OEM). Our analysis highlights the important role of consumer heterogeneity in usage rates as a driving factor of the mechanisms that explain the different market outcomes. Indeed, both the OEM and consumers can benefit from P2P rental markets for intermediate ranges of consumer heterogeneity in usage rates, but both can be worse-off when the heterogeneity is too low or too high. Further, P2P rental markets have an equalizing effect on the heterogeneous consumer population, as low-usage consumers earn relatively more from P2P rentals than the high-usage consumers. We investigate alternative market structures for the OEM, and show that under intermediate levels of consumer heterogeneity in usage rates, it is best for the OEM to operate in the presence of a P2P rental platform. If heterogeneity in usage rates is too low, the OEM prefers to operate as a monopoly, offering sales only, whereas if heterogeneity is too high, the OEM prefers to offer sales and rentals directly to consumers. In addition, if the incumbent firm manages the P2P platform, it would choose to charge a transaction fee equal to zero for P2P rentals. Thus, contrary to what could be expected, the OEM has an incentive to facilitate P2P rentals in a large variety of cases.
42 citations
TL;DR: This work shows why the best business model depends on whether consumer usage rates vary or not, and finds that when consumer variation in usage rates is intermediate, the manufacturer is surprisingly best off avoiding offering its own direct rentals option and instead, facilitating a peer-to-peer rental market where consumers can share among themselves.
Abstract: With peer-to-peer sharing of durable goods like cars, boats, and condominiums, it is unclear how manufacturers should react. They could seek to encourage these markets or compete against them by of...
32 citations
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TL;DR: In this paper, the authors show that public transportation will only remain economically competitive where demand can be bundled to larger units, and that a substantial share of vehicles may remain in private possession and use due to their low variable costs.
355 citations
TL;DR: The sharing economy, a term the authors use to refer to business models built around on-demand access to products and services mediated by online platforms that match many small suppliers or service provide, is a booming sector.
Abstract: The sharing economy, a term we use to refer to business models built around on-demand access to products and services mediated by online platforms that match many small suppliers or service provide...
155 citations
TL;DR: On-demand platforms (e.g., Uber, Lyft) often rely on independent workers, who are not directly under the platform’s control, to be available at the “right” time and locations to serve consumers.
Abstract: On-demand platforms (e.g., Uber, Lyft) often rely on independent workers, who are not directly under the platform’s control, to be available at the “right” time and locations to serve consumers at ...
149 citations
TL;DR: Operations management research has made several important contributions to environmental sustainability over the last two decades, and a new opportunity on the horizon is pointed to.
Abstract: Operations management (OM) research has made several important contributions to environmental sustainability over the last two decades. In this article, we point to a new opportunity on the horizon...
87 citations
TL;DR: The results show that offering products with a relatively high (low) quality in per-use rental services (sales) is highly profitable for product categories with a strong pooling effect or when there are high firm-side benefits from ownership.
54 citations